State of Economic Emergency
declared by all political parties
Decisions include cutting deficit
and selling part of public companies
Top State officials and political and financial leaders have agreed on the broad lines of a three-year economic emergency plan that aims to reduce the fiscal deficit and speed up the implementation of capital investment projects, according to Prime Minister Saad Hariri.
The leaders have approved a medium-term fiscal framework over the three-year period 2020-2022 that aims to achieve an annual primary budget surplus of at least three percent, four percent, and five percent of GDP over each consecutive year, Hariri said. The plan aims to also realize a deficit that does not exceed seven percent, six percent, and five percent of GDP successively over the same period.
The measures include cutting the annual electricity deficit to LL1,500 billion ($1 billion) and conducting an international tender for the purchase of fuel for Electricité du Liban. They also include using natural gas instead of fuel oil for power generation.
The meeting also ended with the approval to merge or close down unprofitable public sector institutions within three months. The leaders have also agreed to sell part of the shares of profitable public sector companies such as Middle East Airlines (MEA) to the general public, Hariri said. This will also boost the capital market in the country, he said.
The leaders have reasserted the policy of maintaining a stable exchange value for the lira. They have decided to speed up the launch of investment projects already approved by Parliament and amounting to $3.3 billion.
The top officials have also given the green light to the Cabinet to approve the projects in the first phase of the Capital Investment Programme (CIP) that was presented at the CEDRE donor conference.
One of the measures approved is to speed up the award of projects by providing the human resources required by the Council for Development and Reconstruction (CDR) and for the concerned ministries. This will be achieved by seeking the assistance of specialized local and foreign companies, Hariri said.
The leaders have also committed to the strict implementation of the 2019 budget without adding any extra expenses. They have also agreed to reduce the public debt through projects carried out under the public private partnership system.
They also affirmed their pledge to freezing hiring in the public sector, and the application of the early retirement plan. They have also committed to go ahead with a project to reform the retirement system which has already started through collaboration between the World Bank and the Ministry of Finance.
Reported by Shikrallah Nakhoul
Date Posted: Sep 03, 2019